What is happening?
A new pension scheme, alpha, was introduced on 1 April 2015. The majority of Principal Civil Service Pension Scheme members (includes classic, classic plus, premium and nuvos) will now have moved in alpha. Most new members will also join alpha.
If you were a member of a public service pension scheme (including classic, classic plus, premium and nuvos) on 31 March 2012, then you will have been affected differently depending on how close you were to your Normal Pension Age (NPA):
- If you were 10 years or less away from your current Normal Pension Age (NPA) on that date, it is less likely that you moved to alpha. You will continue to build up benefits in your current pension scheme. NPA is the earliest age that you can usually take your pension benefits without reduction.
- If you were more than 10, but less than 13.5 years away from your current NPA on that date, then it is likely that you were able to choose whether or not to remain in your current pension scheme for a period of time, based on your age, before moving into alpha.
If neither of the above applies to you, then you will have moved to the new scheme on 1 April 2015. Your pension benefits will be worked out in two parts when you leave the scheme or retire:
- Part 1 – based on your previous scheme arrangement (classic, classic plus, premium or nuvos); and
- Part 2 – based on the pension benefits built up in alpha from 1 April 2015 or the date you join alpha if later.
If you were previously a member of one of the final salary sections (classic, classic plus or premium), the service you built up until 31 March 2015 was ‘banked’. Your part 1 pension benefits will be based on your ‘banked’ service and your pensionable earnings, at or close to the point you leave or retire from alpha. For nuvos members, the part 1 pension benefits will be based on the ‘banked’ pension which you built up until 31 March 2015. Like the existing arrangements, alpha provides a ‘defined benefit’ pension, which will give you a guaranteed income in retirement. Your benefits in alpha will be worked out based on a percentage of your pensionable earnings each year until you leave or retire. This is called a ‘Career Average’ scheme – like the nuvos scheme. An important change in alpha is the age that you can take your pension benefits without reduction. Your NPA is the later of age 65 or your State Pension age (SPA). You can take your pension before or after this age. If you do so your pension benefits will be adjusted to reflect the fact that you may be receiving your pension for a longer or shorter period.
How much will I pay?
You can find out what the 2015 contribution rates are by clicking here.
How will alpha work?
alpha provides you with an income in retirement. The amount of pension you will get is based on a proportion of your pensionable earnings in each year that you work.
Further details about the benefits available and how your pension will be worked out can be found here.
Please note that if you were a member of a public service pension scheme (including classic, classic plus, premium and nuvos) on 31 March 2012 and were 10 years or less away from your current Normal Pension Age (NPA) on 1 April 2012, it is likely that you will not move into alpha. You will continue to build up benefits in your current pension scheme.
Your pension benefits
Your pension will remain a very effective way to save for your retirement and continue to be a significant part of your total reward package.
- Your employer will continue to make a significant contribution to the cost of your pension.
- Your contributions come out of your salary before any tax is taken. This means, if you pay tax, your take-home pay will not be reduced by the full amount of your contribution.
- Your pension will continue to provide valuable benefits for you and your family if you are too ill to continue to work or die before you retire.